AMD's Lisa Su says company is "data center first" as gaming revenue drops 40%

Servers take a larger share of AMD's business

Su's comments came two days after AMD released its third-quarter 2026 results. Total revenue reached $13.4 billion, up 45% from a year earlier, with Data Center revenue rising 97%. Su linked the company's focus to the computing capacity needed to run applications.

The description was not new. TechPowerUp reports that Su also called AMD "data center first" in 2024, when that business accounted for just over half of company revenue.

Both server and GPU sales contributed to the latest quarter's data center growth. According to S&P Global Market Intelligence, server revenue reached $4.76 billion, a 103% year-over-year increase, while GPU sales climbed 97.6% to $3.68 billion. Both exceeded analysts' forecasts. The segment posted a 33.7% operating margin, beating consensus by 365 basis points.

AMD's first Helios rack-scale systems are already running workloads for Anthropic, Meta, Microsoft, OpenAI and Oracle, the company said, according to The Next Web. AMD also agreed to invest $1 billion in Meta.

The financial results also showed lower free cash flow despite the revenue gains. The Next Web reports that free cash flow totaled $554 million, down from $1.53 billion a year earlier. Inventories absorbed about $3 billion, and capital spending reached $648 million, more than twice the year-earlier amount.

What the shift means for PC buyers

AMD's consumer results were mixed. Client revenue increased 7% to $2.9 billion, supported by Ryzen mobile processors, while Gaming brought in $773 million. AMD attributed Gaming's 40% year-over-year decline to "lower semi-custom and graphics revenue". Embedded revenue rose 29% to $1.1 billion.

The annual gaming comparison needs context: revenue was essentially unchanged from the second quarter, according to TechPowerUp. The decline also partly reflects a strong comparison period. In Q3 2025, a console-driven surge of 181% had lifted gaming revenue to $1.3 billion.

For PC buyers, a central question is how AMD will allocate supply. Answering Barclays analyst Tom O'Malley, Su described the flexibility between its PC and server businesses. TheGamer quoted her as saying: "The good part about it is our supply chain is quite fungible across our PC business and our Data Center business. That actually does afford us the ability to move supply around as we see these signals in the market."

That flexibility allows AMD to redirect supply in either direction as demand changes, a prospect that has worried some gamers. TechRadar described "a profound sense of disappointment in AMD on social media" and quoted a Reddit user saying: "AMD was a lot of people's last hope, but looks like PC gaming is over."

The remarks did not announce a withdrawal from consumer products. Su was responding to a question about AI demand and said nothing about reducing Ryzen or Radeon development. AMD also brought back the Ryzen 7 5800X3D in June at $349. Her comments provided no details on Radeon product plans or GPU pricing.

The concerns extend beyond AMD. Nvidia's data center sales continue to rise, while OpenAI's Sam Altman has called it "quite terrible" that RAM sits in a PC rather than a data center. Memory shortages have already pushed up gaming handheld prices.

Forecasts show a widening divide

AMD expects its Client and Gaming segment to fall more than 20% from Q3 to Q4 2026, according to TechPowerUp. Su, meanwhile, expects data center revenue to increase another 50% over the same period.

The company's total fourth-quarter revenue forecast is about $17 billion. If AMD reaches that target, it would surpass Intel's quarterly sales for the first time, The Next Web reports. Intel has forecast revenue of $15 billion to $16 billion for that quarter.

The longer-term projections put even more weight on servers and AI. On AMD's November 3 earnings call, Su forecast company revenue growth of more than 80% in 2027, with data center contributing the most. She expects the data center CPU business to roughly double and the data center AI business to more than double.

CFO Jean Hu said on the same call that data center should generate more than 80% of AMD's total revenue in 2027, compared with roughly 63-64% in Q3 2026.

TheGamer also reports that Su predicted PC sales would "decline by a double-digit percentage" in 2027. She described AI as becoming "more and more essential to every aspect of our lives".

Su said AMD plans three to five years ahead and characterized the market as sometimes "a little bit short-sighted".